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Retirement Plans Newsletter

July 5, 2023

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[Guidance Overview]

SECURE 2.0: Long-Term Part-Time Employees

"Many retirement plans have no income deferral component to their plan at all and are not affected. Also, many plans do not include a number of hours worked before providing access to deferral contributions in the plan and will find that no employee will meet the LTPT definition and have not already been offered the plan."  MORE >>

Benefit Resources Inc.

[Guidance Overview]

401(k) Nondiscrimination Testing: What Is It and How to Improve Your Results

"The key to helping all employees join and save at high rates is making it easy to join, providing personalized education, and effective, ongoing monitoring.... [P]roactively test mid-year. [The] sooner you know, the sooner you can present your forecast to the executive team and propose proactive strategies ... If you are looking to bypass ADP and ACP tests entirely, you can consider a Safe Harbor 401(k)."  MORE >>


Making In-Kind Contributions of Qualifying Employer Real Property to a Defined Benefit Pension Plan

"This article provides a roadmap for plan fiduciaries who wish to contribute qualifying employer real property (QERP) to their defined benefit pension plan, and who would like to ensure that the fiduciary decisions to accept the contribution of such real property -- and on what terms to accept such a contribution -- are made by an experienced, knowledgeable and un-conflicted independent fiduciary, who will solely serve the plan and its participants."  MORE >>


Management and Liquidation of Non-Employer Stock Funds in Retirement Plans

"Retirement plan fiduciaries whose plans contain employer stock funds, may be faced with the challenges of managing a non-employer stock fund within their plans after a corporate reorganization.... This article provides a roadmap for plan fiduciaries who inadvertently find themselves in this dilemma and decide to liquidate the non-employer stock fund."  MORE >>


The Retirement Income 'Low-Hanging Fruit' Option Open to Plan Sponsors

"One plan-design option available to sponsors to help participants create a paycheck in retirement is adoption of systematic withdrawals. But this option requires greater coordination between disparate retirement ecosystem partners to make it work."  MORE >>

PLANSPONSOR; free registration may be required

How to Manage Fiduciary Liability Through Prudence and Care

"[W]hat does a 'good process' look like? These four steps are key ... [1] Review the plan regularly.... [2] Think and act carefully when adding new investments.... [3] Emphasize information and education.... [4] Stay current."  MORE >>

Society for Human Resource Management [SHRM]; membership may be required to view article

Men's Average 401(k) Account Balance Exceeds Women's

"Baby Boomer (ages 58-76) and Gen X (ages 43-57) men have significantly greater account balances than women in their generations (87% vs. 53%, respectively). However, the gap between Millennial (ages 28-42) men and women is only 23%.... When looking at 401(k) savings plans as of the end of last year: [1] Participation rates dropped only slightly to 56% from 58% in 2021. [2] Average contribution rate declined to 6.4% from 6.6% in 2021. [3] 26% of participants increased their contribution rate as compared to 8% of participants who decreased their savings rate."  MORE >>

Merrill Lynch

Retirement Expectations vs. Reality: Factors That Impact Retirement Decisions

"[T]his study demonstrates that although there is generally a natural upward trend for older (age 50+) Americans to progressively delay their expected retirement, this trend has no statistically significant relationship with the COVID-19 pandemic.... The most significant factors influencing participants' retirement decisions relative to expectations are health, wealth, age, marital status change, mortality expectations, education levels, disability, and major illness diagnosis. Focusing on these factors can help the retirement benefits community explore strategies to mitigate the negative consequences of gaps between retirement expectations and reality."  MORE >>

Zhikun Liu, David Blanchett, Qi Sun, and Naomi Fink, via SSRN

Rollover Not Always Superior to 401(k)

"59% of advisers made the decision not to roll over their clients' 401(k) into an IRA or other account in 2022, due to better benefits offered by the existing retirement plans and advisers' ability to effectively manage the assets within those plans. From 2016 to 2021, $2.9 trillion of IRA asset growth was from rollovers of retirement plan accounts. It is estimated that more than half of this amount was facilitated by financial advisers[.]"  MORE >>


Employee Benefits Jobs

View job as Paralegal - Retirement Plan Administration
            for Best Best & Krieger LLP

Paralegal - Retirement Plan Administration

Best Best & Krieger LLP


View job as Paralegal - Retirement Plan Administration for Best Best & Krieger LLP

Selected New Discussions

When Exactly Does Age 59½ Penalty Exception Apply ?

"For the exception to the 10% penalty, when does the distribution have to occur? That is does the distribution have to happen 6 months after the participant turns age 59 or is it anytime in the year in which they turn 59½? This participant will reach 59½ anniversary in October 2023. Normally I'd just tell them to wait but the participant is going on leave due to medical issue that may be terminal so waiting until October may not be an issue. If it is after age 59½ is there a hardship exemption to the 10% penalty that would allow the distribution now without penalty? I realize there is a work around where the client could deem him terminated and thus the withdrawal would be after separation of service after attainment of age 55 and not subject to the 10% penalty but there might be reasons like health insurance that they would want to classify him on leave instead of terminated."

BenefitsLink Message Boards

Press Releases

Martin, Martin, Randall & Associates, Inc. (MMR) adds new Sales Team Professional in the Tampa Bay Region

Martin, Martin, Randall & Associates, Inc. [MMR]

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

DOL Update: Fireside Chat with Lisa Gomez, Assistant Secretary of Labor

July 26, 2023 WEBINAR

American Bar Association Joint Committee on Employee Benefits [JCEB]

Last Issue's Most Popular Items

Excessive Fee Suit Takes Some New Tacks

American Retirement Association [ARA]

Third Circuit Holds Class Action Waiver in ESOP Plan Arbitration Provision Is Unenforceable

Roberts Disability Law

Jury Sides with Yale in 403(b) Lawsuit


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BenefitsLink® Retirement Plans Newsletter, ISSN no. 1536-9587.

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